Department for Levelling Up, Housing and Communities

The Review of Intergovernmental Relations

Michael Gove: Today the UK government has published an update on how the UK government and the devolved administrations intend to conduct formal intergovernmental relations with each other. All four governments have agreed to work under these new arrangements. I will be depositing the Review of Intergovernmental Relations in both House libraries.The Review of Intergovernmental Relations, developed jointly by all four governments, provides an up-to-date and fit-for-purpose system, introducing new structures for more regular, formal intergovernmental engagement and new processes to increase impartiality and to avoid, resolve and, where necessary, escalate disputes. It is a commitment to a cooperative spirit and to constructive collaboration with the devolved administrations, through more transparent and accountable arrangements, and will be to the benefit of citizens in every part of the UK.

Department for International Trade

Trade Update

Anne-Marie Trevelyan: Today I am formally launching free trade negotiations between the UK and India from New Delhi, where I am meeting my Indian counterpart, Honourable Minister for Commerce and Industry Piyush Goyal.In line with our commitments to scrutiny and transparency, the Department for International Trade has published, and placed in the House libraries, more information on these negotiations. This includes;The UK’s strategic case for a UK-India Free Trade Agreement (FTA)Our objectives for the negotiationsA summary of the UK’s public consultation on trade with IndiaA scoping assessment, providing a preliminary economic assessment of the impact of the agreement A UK-India FTA would be a substantial opportunity for both of our economies and a significant moment in the UK-India bilateral relationship.Trade negotiations are a priority for both countries and build upon the Enhanced Trade Partnership launched by Prime Minister Boris Johnson and Prime Minister Narendra Modi in May 2021.The UK-India bilateral trading relationship is already significant, amounting to over £23 billion in 2019, and both sides have agreed to double bilateral trade by 2030. The UK and India will seek to agree a mutually beneficial agreement supporting jobs, businesses and communities in both countries.By 2050 India will be the third largest economy in the world. The size and growth of the Indian economy means a deal would unlock opportunities in every nation and region of the UK and across all parts of our economy. Tens of thousands of UK jobs are already supported by trade with India, and a trade deal has the potential to almost double UK exports to India, boost our total trade by as much as £28 billion a year by 2035, and boost wages across the UK by as much as £3 billion.The opportunity is illustrated further by looking at some specific sectors. UK exports like Scotch whisky and cars currently face large duties of 150% and 125% respectively. A deal that removed these significant barriers to trade would make UK firms like car-makers in England’s North East and whisky distilleries more competitive.Services account for almost half of current exports to India and our analysis shows UK companies – from insurance providers, to construction firms, to financial services – are set to gain from a deal as India’s economy continues to grow. This could include opportunities for companies that trade digitally, as the Indian government aims to have a trillion-dollar online economy by 2025 and increase internet access to more than 600 million people.In addition, India’s plan to rapidly expand offshore wind power generation is a major opportunity for the UK’s world-leading renewable industry that could see UK wind turbines making a major contribution to helping the world reach net zero. UK exporters would benefit from a reduction of tariffs such as a 15% tax on certain wind turbine parts.A deal with India would be a big step forward in the UK’s strategy to refocus UK trade on the Indo-Pacific, where half the world’s people live and 50% of global economic growth is produced. A new economic partnership with India, alongside UK membership of the Asia-Pacific trading bloc, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), would create a pillar in the region supporting free and fair trade.During negotiations, and on the path to a comprehensive agreement, both Governments will consider the option of an Interim Agreement that generates early benefits for both countries. In parallel to trade negotiations, the UK-India Joint Economic and Trade Committee will continue to work in improving the UK-India trading relationship and addressing market access barriers outside of a trade agreement.The first round of FTA negotiations will begin on 17 January. As negotiations progress, I will ensure that Parliamentarians, UK citizens and businesses are provided with regular updates.

Foreign, Commonwealth and Development Office

The Sanctions Regulations Report on Annual Reviews 2021

Vicky Ford: My noble Friend the Minister for South and Central Asia, United Nations and the Commonwealth (Lord Ahmad of Wimbledon), has made the following Written Ministerial Statement:Today I am pleased to publish “The Sanctions Regulations Report on Annual Reviews 2021”.Section 30 of the Sanctions and Anti-Money Laundering Act 2018 requires the Minister to annually review each set of sanctions regulations to assess whether they are still appropriate for the purpose stated in them. The Minister must lay before Parliament a report containing conclusions of the review, the reasons for those conclusions, and a statement of any action that that Minister has taken or proposes to take. The Sanctions Regulations Report on Annual Reviews 2021 meets the requirement of Section 30.Since the end of the Transition Period, the UK has been pursuing an independent sanctions policy, driven by our foreign policy objectives and projecting the UK as a network of liberty and defender of human rights. As set out in the Integrated Review, the UK uses our sanctions regimes as part of an integrated approach to promote our values and interests, and to combat state threats, terrorism, cyber-attacks, and the use and proliferation of chemical weapons.

Gibraltar: UK-EU negotiations

Chris Heaton-Harris: On 14 and 15 December 2021 the UK hosted a fourth round of negotiations with the European Union (EU) on Gibraltar, following previous rounds in December, November and October 2021.Talks have been constructive and are making positive progress. Discussions have covered a range of issues within the Political Framework agreed between the UK Government, together with the Government of Gibraltar, and the Kingdom of Spain on 31 December 2020.Ensuring the fluid movement of people between Gibraltar and the EU has been the key area of discussion. Other areas have included the movement of goods, law enforcement and criminal justice, transport, social security coordination, citizens’ rights, and data protection.Negotiations with the EU will continue in the coming weeks. The UK remains fully committed to seeking a treaty based on the careful and pragmatic balance achieved by the Political Framework. The UK has been clear we will not agree to anything which compromises UK sovereignty.We are, of course, working closely with our Gibraltarian friends for a solution that works for the people of Gibraltar so they can go about their business. The UK Government and Government of Gibraltar agreed our joint approach to negotiations at the UK-Gibraltar Joint Ministerial Council on 29 March 2021. Since then, we have and will continue to work closely together as discussions with the EU progress.The UK Government and Government of Gibraltar have also continued work to ensure robust plans are in place for all eventualities, including a no negotiated outcome. While the Political Framework provides the route to a treaty it is only prudent to prepare for all eventualities.In parallel to the UK-EU negotiations the UK Government, with the Government of Gibraltar, is maintaining a regular dialogue with the Kingdom of Spain.In December, the Foreign Secretary travelled to Madrid to meet the Spanish Minister of Foreign Affairs José Manuel Albares to discuss strengthening the bilateral relationship between our two nations. The Ministers also welcomed the constructive nature of negotiations between the EU and the UK, reaffirmed their shared commitment to the Political Framework and agreed that it is in everyone’s interest to conclude these talks in the first quarter of 2022. The UK looks forward to hosting the Spanish Minister of Foreign Affairs on a visit to London in the coming weeks.

Treasury

Penalty Reform for VAT

Lucy Frazer: In Finance Act 2021, the Government legislated to reform penalties for late submission and late payment of tax, initially from 1 April 2022,  and to align interest charges for VAT with other major taxes. Today, I am announcing that these changes for VAT businesses  will now be introduced 9 months later, on 1 January 2023. HMRC is committed to becoming one of the most digitally advanced tax authorities in the world. The ambition and pace of change needs to be balanced with  well-tested systems and  good customer service, particularly when businesses are facing additional challenges and uncertainty. This  extra  time allows HMRC to ensure the IT changes necessary for the new penalties and interest charges can be introduced as effectively as possible,  ensuring a high standard of service to customers.